How to Give to Charity Directly From Your IRA

The Tax Rule Most Retirees Do Not Know About

If you are 70-1/2 or older and have a traditional IRA, there is a way to donate to charity that most people have never heard of -- even though it has been available for years. It is called a Qualified Charitable Distribution, or QCD. Instead of withdrawing money from your IRA, paying income tax on it, and then writing a check to your church or favorite nonprofit, a QCD lets you send the money directly from your IRA to the charity. The amount you give is excluded from your taxable income entirely. You never see the money, so the IRS does not count it as income.

This matters more than it might seem. For many retirees, every extra dollar of income affects their tax bracket, their Medicare premiums, and whether other deductions or credits start to phase out. A QCD avoids all of that because the distribution never shows up as income on your tax return.

How It Works Step by Step

The process is straightforward, but the details matter. The money must go directly from your IRA custodian (the bank, brokerage, or financial institution that holds your IRA) to the charity. You cannot withdraw the money into your personal account first and then donate it -- that does not qualify. Most IRA custodians have a process for this, often involving a simple form or a phone call to request a distribution check made payable to the charity.

Here are the key rules: you must be at least 70-1/2 years old at the time of the distribution. The maximum amount you can give through QCDs in a single year is $111,000 (as of 2026), and that limit is per person -- so married couples with separate IRAs can each give up to $111,000. The charity must be a qualified 501(c)(3) organization. Donor-advised funds, private foundations, and supporting organizations do not qualify, even though they are technically charities.

Why This Matters for Required Minimum Distributions

Starting at age 73, the IRS requires you to take a minimum amount out of your traditional IRA each year -- this is your Required Minimum Distribution, or RMD. That withdrawal counts as taxable income whether you need the money or not. If you were planning to give some of that money to charity anyway, a QCD lets you satisfy part or all of your RMD while keeping the distribution out of your taxable income.

For example, say your RMD for the year is $12,000 and you typically donate $5,000 to your church. If you take the full $12,000 as a normal distribution, you pay income tax on all $12,000. But if you send $5,000 directly to your church as a QCD, only $7,000 counts as taxable income. The $5,000 never hits your tax return as income. You still need to withdraw the remaining $7,000 to satisfy your RMD, but your total taxable income is lower.

Who Benefits Most From This

QCDs are especially useful for people who take the standard deduction on their taxes. Since the standard deduction was raised significantly in recent years ($15,000 for single filers and $30,000 for married couples in 2025), the majority of Americans no longer itemize. That means regular charitable donations, while generous, do not provide any direct tax benefit. A QCD sidesteps this entirely because it is not a deduction -- it is an exclusion from income. You do not need to itemize to benefit from it.

It is also valuable for retirees who are close to income thresholds that affect Medicare premiums. Medicare Part B and Part D premiums increase once modified adjusted gross income exceeds certain levels. Keeping IRA distributions out of your taxable income through QCDs can help avoid those surcharges, which can add hundreds of dollars per month to your premiums.

Common Mistakes to Avoid

The most common mistake is withdrawing the money to your personal account first and then donating it. That disqualifies the entire distribution as a QCD -- it becomes a regular taxable withdrawal. The transfer must go directly from the IRA custodian to the charity.

Another common issue is not getting proper documentation. The charity should provide a written acknowledgment of the donation, just like any other charitable gift. And on your tax return, you need to report the full distribution on the IRA line but mark the QCD portion correctly. Your tax preparer or tax software should walk you through this, but it is worth mentioning because QCDs do not get a separate box on the 1099-R form your IRA custodian sends you -- they show up as a normal distribution.

Finally, be aware that if you have made deductible IRA contributions after age 70-1/2, those contributions can reduce the amount of your QCD that qualifies for the income exclusion. This is a less common situation but worth noting if you continued contributing to a traditional IRA later in life.

How to Get Started

Call your IRA custodian and ask about their process for making a Qualified Charitable Distribution. Some institutions have online forms, others require a phone call or a mailed request. Allow enough processing time before December 31 if you want the QCD to count for the current tax year -- some institutions need several weeks to process the distribution and mail the check. It is one of the most straightforward tax-efficient giving strategies available, and it takes about 15 minutes to set up.